Looking for inspiration by reading Marcello’s and Andy’s blogs today. If you do not know, Marcello owned Sampa, and Andy Sack owned Judy’s book. Sampa closed on August 15th, and Judy’s book closed over a year ago, but both are prolific bloggers and have also documented their experiences.

Where I am at right now is busy owning responsibility for the issues and process. Regardless of who is coming to my defense, the bottom line of all this is that in the end, it is truly my responsibility no matter how we couch this one.

Following up on the failure of Sampa, I have a lot of sympathy for Marcello right now. While our circumstances are different, he sold web space and I sell product, my overall sales for the month are down 70% after making a bet the company deal to pick up product at an insane discount. Since this was my leadership decision, the increase in fear and politics at the company has increased exponentially as sales have not only stagnated by decreased significantly in the last 30 days. Not a great way to start out the back to school season, although I also understand this, many consumers are scared, and while they might get themselves a treat now and then, it is easy to just focus on the necessary things that people need to purchase.

Part of the problem with bad news, especially when they are by the numbers (and depending on your leadership style) you wills either share this with your employees, or you will not. I made the choice to share this with my employees, and the fear uncertainty and doubt went exploding through the roof. While I am naturally an optimistic person (and who isn’t when they are doing their own startup), many people are not. They are looking for stability (you won’t find this in a startup when the numbers can gyrate exponentially day to day if not month to month) and unfortunately found themselves in a startup. A person’s innate ability to deal with uncertainty and ambiguity says a lot about how they will handle the stress of money not coming in and knowing that there is not much to do about it. The bank account is tapped because we just got done with a bet the company deal that is quickly heading south.

Which brings me back to the bet the company deal, would I do it again, yes, because it felt right at the time, my board of advisors also agreed with my numbers and they did check them out. My friends, family, and everyone who wanted to chime in also thought that was too good a deal to pass up. Even if 30 days after completing the deal, we are finding out that the 5% probability of things heading south did happen. I was open with the deal, and I was open with the bad news. The natural instinct is to downplay the bad news or simply stop talking (which will have its own effects in its own right now and into the future). Since my management style has been open, go be your creative best; here is what is happening in the company, if I change that now, people will start thinking worst-case scenario. They will invent their own demise, they will self defeat, and take everyone along with them.

My only real choice now, and in line with the things that Andy and Marcello have to say on the subject is still be honest, but also focus on the bright side of this one before it implodes. Don’t hide the issues, address them, and try to keep the lines of communication open. This also means that everyone needs to see everyone working their hardest not just to save their own jobs, but the company along the way. This includes all the management staff, everyone, all the time. While we are at the whim of the consumer, we are also getting to the end of August, meaning the back to school season and the holidays are starting to come up. There is plenty of cash to make it through the end of December if we pull from our own sources of funding. This is what we keep on saying (and trust me my folks read this blog), and how we need to approach the next quarter. This quarter we have seen 300% Month over Month growth, we missed two big down months by dodging a sales decline in February and in June. If August is our down month, then that is ok. August last year was as good a month as December that does not mean that this year will necessarily follow the same sales cycle.

Keeping that message consistent, and keeping people informed is what needs to happen. What will be interesting in the longer run is getting control of the FUD (Fear Uncertainty Doubt), minimizing the politics in the company, and adjusting the leadership style to keep tighter control on what is happening. Squish the rumors when they happen, if anyone gets too political they might need to go. The key to this is being proactive as a manager, and keeping on top of the issues in ways that we have not done in the past. That is the challenge for the management team, can we pull our life lessons from here and pay more attention to detail?

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Dan Morrill works in Interactive Media and Cloud delivery systems for
Comics Forge as the COO. He has been blogging since 2003 covering
different emerging technologies, management and information security.
Dan works as a founding member of a number of startups, including
Startup Academy International and Dead Tree Comics. His interests are
in intellectual property protection, piracy, and information security
as it applies to cloud computing. He also has a deep interest in
media, mobile computing, and education.. His personal blog is here, his other pro-blog is here .